June 27, 2008
FREE MARKETS REQUIRE INTELLIGENT DESIGN:
High Oil Prices: It's All Speculation: The Administration says oil's runup is due to shortages, but the evidence points to manipulation (Ed Wallace, 6/27/08, Business Week)
Today, while energy prices are crushing American families, I think we'd all benefit by reflecting on what happened with energy in 2001. Seven years ago, Enron was fleecing California, extorting its people for electricity to the tune of billions of dollars. As is true today, some voices in the Administration claimed that supply shortages, not manipulation, formed the core of California's soaring electricity prices. Yet, now that we know the whole story of Enron's criminal manipulations, many menbers of the media have forgotten how in 2001 the White House deflected any blame for California's suddenly stratospheric electrical costs away from their Houston friends.Likewise, our Energy Secretary has a real problem discussing issues with facts. Like a broken record, he continues to maintain that in no way has speculation had anything to do with today's high oil prices. No, to hear Sam Bodman tell it, they are now and always have been caused by too many buyers chasing too few barrels of oil. But, while that might have been true in 2004, things have changed. And so I give you just one week of news from the oil market.
The state of Nature is incapable of rendering the dynamics that capitalism depends on. Posted by Orrin Judd at June 27, 2008 8:26 AM
I don't agree with some of the conclusions in the linked article, but there are some strange problems with what has happened to oil prices. Certainly oil consumption has turned out to be more inelastic than some thought, and the falling dollar is a significant part of the problem, but I can't find a causal link between supply and demand that would account for such a rapid rise in price. I think (hope) these futures traders may lose a chunk of money in the near future.
Posted by: Patrick H at June 27, 2008 11:23 AM
The problem in California was a combination of fraud by Enron and stupid policies by the California government. And that energy crunch effected only California.
How the heck do they think that "speculators & manipulation" can cause an energy crunch in the whole world???? Do they have any idea of the magnitude of the worldwide oil market?
'course, these are the same people that think mankind can cause global warming and ignore that glowing ball in the sky.
Posted by: ray at June 27, 2008 10:51 AM